The Cabinet Office’s senior adviser on mutuals has warned against local transport co-operatives operating without community representation, Surveyor can reveal.

Ministers have urged council chiefs to consider how John Lewis style co-operatives might deliver a range of local services using recently established ‘right to provide’ and ‘right to challenge’ powers.

In a letter to all council chief executives and leaders, dated 26 July, cabinet secretary Francis Maude wrote there was ‘a growing body of evidence highlighting the spectrum of benefits’ they could bring.

He added mutuals offer a new way to ‘harness the potential’ of the public sector workers to drive improvements in services.

Mr Maude highlighted in the letter research done by the independent ‘mutuals taskforce’ - commissioned to report on the cooperative model by the Cabinet Office - and chaired by Professor Julian Le Grand of the London School of Economics.

However, in an exclusive interview with Surveyor, Prof Le Grand warned local transport would require its own co-operative model in order to operate in the best interests of the community.

‘If you are dealing with a large organisation or an area where there is a monopoly in local services, I think we would want considerable involvement from communities. A multiple stakeholder model, as they say. I think local transport services, such as bus services, is one example of this, where employees and communities should be involved’, Prof Le Grand said.

Prof Le Grand went on to say ‘mutuals have a closer link to the community and might be able to do a better job in providing communities with the transport services they need’.

Although he added that ‘mutuals are not a solution to everything’, and recent criticism of local transport system could have more to do with a lack of finance rather than their ownership models.

The Cabinet Office’s mutuals team is currently working with the Department for Communities and Local Government, the Local Government Association and councils to develop best practice guidance on mutuals, explore opportunities and raise awareness.